When I ran Mallee’s Biggest Survey last year, over 73 per cent said business taxes are too high.  Sadly, Labor’s inability to control their spending means Treasurer Chalmers is yet again coming after family businesses for more revenue.  As many Australian small businesses have complained online, the Prime Minister is becoming an unwelcome ‘silent partner’ in their business.

From 2028, Labor proposes a 30 per cent minimum tax on income from the discretionary trusts that underpin many family businesses. But the Treasurer has already been forced to back-pedal, offering an alternative: lock in fixed distributions to beneficiaries to avoid the new tax floor.

In other words, Labor will penalise those that manage risk using discretionary trust flexibility.

Labor says this will stop income splitting and make business income more like wages, but running a family business is not the same as earning a wage.  Mum and Dad businesses may have mortgaged their home, invested their savings and worked seven days a week with no guarantee of a return. They carry the risk, create jobs and invest in their communities. When the business fails, Treasury doesn’t turn up with a cheque.

Tax experts warn Labor’s fixed approach to trusts could see a future child or grandchild create serious tax consequences – a baby tax.

Labor anticipated death and divorce in their plans — but apparently forgot that families also have babies.
This is what happens when ideology collides with reality.

It also exposes a fundamental political divide.

Labor’s instinct is to redistribute wealth. The Coalition’s instinct is to create wealth— by backing Australians who take risks with their own capital, build businesses and employ others.

By all means, prosecute tax evasion and close genuine loopholes. But don’t treat successful family businesses legally arranging their affairs as a problem government needs to solve.

Jim Chalmers should scrap this badly designed tax grab instead of patching it up.

Australia needs a government that backs more people prepared to have a go, not a government continually finding new ways to tax them.

Australia’s mum and dad businesses shouldn’t have to keep paying for Labor’s reckless spending.